Oil is getting cheaper again, and again thanks to Trump
10 July 2025 09:03
Oil prices declined on Thursday as market participants perceived US President Donald Trump ‘s latest statements on tariffs as a threat to global economic growth, but signs of strong demand for gasoline in the US limited losses. This is reported by "Komersant Ukrainian" with reference to Reuters.
Futures for Brent crude oil fell 3 cents to $70.16 per barrel as of 06:01 Kyiv time. U.S. West Texas Intermediate fell 6 cents to $68.32 per barrel.
On the demand side, macroeconomic uncertainty has led to a more cautious purchasing environment, especially in Asia, analyst firm Kpler said in a note, noting that geopolitical risk premiums have disappeared due to the observance of the truce between Israel and Iran.
On Wednesday, Trump threatened Brazil, Latin America’s largest economy, with punitive 50% duties on exports to the United States after a public spat with his Brazilian counterpart, Luiz Inácio Lula da Silva.
Earlier, Trump announced plans for duties on copper, semiconductors, and pharmaceuticals. His administration sent customs letters to the Philippines, Iraq, and other countries. This added to more than a dozen letters issued earlier this week, including letters to powerful US suppliers South Korea and Japan.
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Policymakers remain concerned about inflationary pressures from Trump’s tariffs. Only a “couple” of officials at the June 17-18 Federal Reserve meeting said that interest rates could be cut as early as this month.
Higher interest rates make borrowing more expensive and reduce demand for oil.
The increase in US crude oil stocks provided some support to prices. At the same time, gasoline and distillate stocks fell last week. This was reported by the Energy Information Administration on Wednesday. Gasoline demand increased by 6% to 9.2 million barrels per day last week.
The daily number of airline flights worldwide averaged 107,600 in the first eight days of July. This is an all-time record. Flights in China reached a five-month peak. Port and cargo activity indicates a “steady expansion” of trade operations compared to last year. This was stated by J.P. Morgan in a note to clients.
“Since the beginning of the year, global oil demand growth has averaged 0.97 million barrels per day. This is in line with our forecast of 1 million barrels per day,”
– the note says.
There are doubts that the recent increase in OPEC production quotas will lead to an actual increase in production. Some members are already exceeding their quotas. This was stated by Tony Sycamore, an analyst at IG.
“Others, like Russia, are unable to meet their targets due to damaged oil infrastructure,”
– he said.
OPEC oil producing countries are ready to approve another significant increase in production for September. This will complete the lifting of voluntary production cuts by eight members. The United Arab Emirates is also moving to a larger quota.
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